Novonix, an ASX-listed manufacturer of battery materials and technology, has been chosen by the US Department of Energy (DOE) to receive a USD 103 million (AUD 159 million) tax credit under the Qualifying Advanced Energy Project Allocation Program.
The tax credit will support the production of crucial battery materials at NOVONIX’s Riverside facility in Chattanooga, Tennessee, the company said in a media release.
Originally enacted under the American Recovery and Reinvestment Act of 2009, the 48C tax credit was bolstered through an additional USD 10 billion in funding under the Inflation Reduction Act of 2022.
The program incentivizes clean energy property manufacturing and recycling, industrial decarbonization, and critical materials processing, refining, and recycling.
It aims to create high-quality jobs, reduce industrial emissions, and enhance US domestic production of vital clean-energy products and critical materials.
Notably, under the IRA, a qualifying advanced energy project credit can be monetized through its sale for cash or used to offset income tax liability.
However, the realization of the full amount of this tax credit is contingent upon satisfaction of the requirements outlined in Section 48C of the Internal Revenue Code and operational and employment plans specified in the application to the Internal Revenue Service.
The company has a two-year period within which to fulfill these requirements and claim the tax credit.
In a highly competitive selection process, NOVONIX was chosen as one of the program’s first beneficiaries from among numerous applicants.
Previously, the company received a USD 100 million grant for its facility from the DOE’s Office of Manufacturing & Energy Supply Chains, enabled by the Bipartisan Infrastructure Law.
Additionally, NOVONIX continues to pursue funding support under the DOE Loan Programs Office’s Advanced Technology Vehicles Manufacturing Program.
Dr Chris Burns, CEO of NOVONIX, expressed that amid a period marked by company milestones, the approval of their 48C application reinforces their financing strategy and signifies another significant achievement for NOVONIX.
“With this support, we believe we are poised to further expand our operations, create high-quality US jobs, and advance our mission of developing technologies and materials to service the EV and ESS sectors,” the CEO remarked.
